Pen Pals: 'Bonehead' German Finance Minister Sends Invite to Krugman

Pen Pals'Bonehead' German Finance Minister Sends Invite to Krugman

Nobel Prize winning economist Paul Krugman has blasted Germany's Peer Steinbrück for his resistance to economic stimulus spending. Now the "boneheaded," "know-nothing" finance minister has sent Krugman an invitation to come to Berlin to discuss their differences.

Nobel Prize-winning economist Paul Krugman is used to addressing large audiences, whether in the lecture halls of Princeton University or from his prominent perch as a columnist at the New York Times. But, Krugman will soon receive an request to speak before an audience of one. Earlier this week, German Finance Minister Peer Steinbrück sent an official invitation to Krugman to meet with him in Berlin to discuss their differences on the financial crisis.

REUTERS

Finance Minister Peer Steinbrück wants to chat with Paul Krugman

It won't be the first time the two men have corresponded -- though until now, the communication has been one-sided and consisted mainly of Krugman making disparaging remarks about Steinbrück via his column and blog. Indeed, Krugman has repeatedly emphasized his belief that deficit spending is among the few bulwarks against a reprise of the Great Depression and he hasn't shied from pillorying those with a cooler attitude towards stimulus.

Steinbrück has been among his favorite targets. Krugman has blasted Steinbrück, who took office hoping to balance the German budget and together with Chancellor Angela Merkel has withheld his support for further European or national stimulus packages, for his "
know-nothing diatribes" and "
boneheadedness." Krugman's most painful insult of all may have been his suggestion that the criticisms of "crass Keynesianism" offered by Steinbrück, a member of Germany's center-left Social Democratic Party, most closely resemble the thinking of America's Republican Party.

What Krugman has depicted as economic ignorance, Steinbrück wants to see as a difference of opinion. The finance minister has said he wants to see the effects of Germany's previous stimulus measures -- the German parliament passed a 50 billion spending bill in January -- before endorsing another round of spending.

Furthermore, as Krugman himself has noted, strong social welfare programs, like those in Germany, mitigate the need for deficit spending in times of crisis. German economists, informed by the legacy of their country's experience with hyperinflation and national insolvency during the 1920s, are also generally more concerned about the risk of inflation than their American counterparts.

But, if Krugman takes Steinbrück up on his invitation, he may want to prepare to receive an earful. Steinbrück shares Krugman's penchant for straight-talk and he certainly hasn't hesitated to assign blame for the economic crisis. "The source and focus of the problems are clearly in the United States," he told SPIEGEL in September.